You need to select a standard ESX server image .vmdk and not the growable one. I tried the growable one several ways and didn’t get it to work.

Notice that disk type is greyed out. That is okay.:

I suggest naming the file so that it matches the name of your virtual machine.

While it is converting, which will take a moment, go ahead and create the base VM. The following is the base configuration/minimum requirements:

Create the VM, then go and upload the .vmdk and -flat.vmdk files to the folder on the datastore where the VM is located. You can see the remnants of some of my testing with converted growable .vmdks that I later removed from the datastore.

Make sure to Expose hardware assisted virtualization to the guest VM:

–> Add SATA Controller 0

–> Add an existing hard disk, point it to the recently uploaded .vmdk and then assign it to the SATA Controller at port 0:0.